Release the hounds!
Jacob Weisberg has the right idea. (I don't know if Kerry will go after Bush's draft avoidance, but "unshirted hell" was definitely today's agenda.)
Perhaps Kerry should try to turn this libel to his advantage, the way an Alfonse D'Amato would have, by loudly proclaiming his injury. Without getting into the substance of the charges (which is a no-win situation), he should give Bush unshirted hell for the sleaze being sent out in his name. Kerry could ask his friend John McCain to stop campaigning for Bush until the Swiftvets ads stop. If Bush doesn't respond, Kerry should loose his own attack dogs and make a bigger issue out of Bush avoiding the draft.
Kerry volunteered to go to Vietnam and, once there, volunteered for dangerous duty. He killed enemy fighters, was injured and decorated. Then he came home and distinguished himself in opposition to the war. That a president who shirked any similar duty would try to make an issue out of Kerry's war record is simply amazing.
Actually, it's not all that amazing if you know anything about Dubya.